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How To Lower Workers’ Compensation Costs

Workers’ compensation fraud is a growing problem for employers. According to the California Department of Insurance, fraudulent workers’ compensation claims cost the state between $1 and $3 billion annually.

When employees file false claims, it hurts a business’s bottom line. Samuel Hale offers services to help eliminate fraud and litigation from such claims. Our effective interventions are guaranteed to produce a 50 to 80 percent decrease in incurred claims.

What Is Workers’ Compensation Fraud

False workers’ comp claims are classified as white-collar crime. The FBI defines white-collar crime as being financially motivated and non-violent.

Workers’ compensation fraud falls under California Penal Code 118 (perjury) and Penal Code 470 (forgery). A workers’ comp claim fraud is committed when someone:

  • Knowingly makes a false material statement for the purpose of obtaining workers’ comp
  • Prepares and submits multiple claims for the same injury
  • Submits healthcare benefit claims covered by workers’ compensation that was not used by the claimant

you can also read: 7 ways to lower workers’ comp claims

Tips for Lowering Workers’ Compensation Costs

There are several things businesses can do to help lower their workers’ compensation costs.

  1. Choose Wisely
    Shop around for the best deals on workers’ compensation policies. Businesses are required to purchase workers’ comp insurance from a licensed company or the State Compensation Insurance Fund. The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) provides a listing of agents licensed to sell workers’ comp policies.
  2. Focus on Safety
    One of the best ways to reduce costs associated with workers’ comp claims is to place an emphasis on safety in the workplace. Regularly share best practices and opportunities for ongoing safety training for all employees.
  3. Follow Best Practices
    Ensuring your claims manager is following best practices for claims management will go a long way toward reducing the amount you pay out in workers’ comp claims.
  4. Establish a Procedure
    Having a procedure in place for managing injuries quickly and efficiently is important. A well-thought-out plan should include outlines for immediate actions when a work injury occurs, including who is responsible for obtaining information from the employee and submitting it to the claims adjuster. Spell the process out from beginning to end and then follow it to the letter.
  5. New Employee Incentives
    Reward your new employees for learning about safety protocols. More seasoned employees can be paired with new hires to go over safety procedures and your business’s established culture of safety.
  6. Stay in Contact
    Companies who stay in contact with injured workers when they are off are more likely to lower their costs associated with workers’ comp claims. Have a procedure in place to dictate the terms for contact with the injured employee to ensure consistency. Consider rewarding employees who are able to return to work as soon as it’s safe to do so.
  7. Rewards Program
    The idea might seem cheesy, but rewards programs work. Check with your insurance provider to see if they offer any incentives for workplace safety records that can be passed on to your employees. Even if they don’t, it might be a worthwhile expense to establish one on your own.
  8. Review Classifications
    This often-overlooked step is an important one in lowering your workers’ compensation costs. Insurance companies sometimes improperly classify employees on their workers’ comp policies, which can raise rates significantly. For instance, you would not want the office receptionist to be classified in the same way as the construction worker on the scene of a job. The rates for an on-site construction worker – who is more prone to serious accidents and injuries – will be much higher than for a clerical worker.

Next Steps

Samuel Hale offers clients the opportunity to receive a free claims analysis. It is the first step toward reducing your risk for false workers’ comp claims. Let our workers’ comp experts provide you with a custom-made roadmap for navigating existing claims and managing future ones.

Still, have questions? Reach out to us toll-free at (855) 726-4253.